Paxos, a leading blockchain and tokenization infrastructure platform, has announced a significant legal victory. The US Securities and Exchange Commission (SEC) has formally terminated its investigation into Paxos Trust Company regarding Binance USD (BUSD) stablecoin. The SEC has stated that it will not recommend enforcement action against Paxos.
Paxos Maintains Stablecoins Are Not Securities, SEC Agrees
This conclusion follows a Wells Notice issued in February 2023, which Paxos had consistently argued was unwarranted and unjustified. In response to the SEC’s decision, Paxos released a statement emphasizing its adherence to federal securities laws and its unwavering commitment to the safety and stability of its stablecoins.
Paxos Trust Company stated that it has always maintained that its USD-backed stablecoins are not securities under federal securities laws. The company expressed pride in its relentless advocacy for stable-value digital assets and noted that the SEC staff determined it would not bring enforcement action against Paxos in connection with BUSD.
Paxos believes that this positive outcome will catalyze a new wave of stablecoin adoption among global enterprises. The company highlighted that well-designed stablecoins with robust consumer protections, such as those issued by Paxos, have the potential to revolutionize the financial system. These advancements promise to make the financial system more stable, accessible, and transparent.
Paxos Prioritizes Asset Safety and Innovation in Financial System Overhaul
The company’s commitment to customer asset safety remains paramount. Paxos reiterated that its issued stablecoins are always backed 1:1 with US dollar-denominated reserves, fully segregated, and held in bankruptcy-remote accounts. Paxos stands out as the only issuer to have secured regulatory oversight, enabling it to introduce safe solutions that drive significant innovation across the global financial system
Paxos’ infrastructure products form the foundation of a new, open financial system designed to operate faster and more efficiently. The company aims to replatform the financial system, allowing assets to move instantaneously anywhere in the world. This is a crucial step toward overcoming the inefficiencies and inaccessibility of the current financial system, where trillions of dollars remain locked in outdated financial structures.
With this clearance from the SEC, Paxos is poised to lead the charge in stablecoin innovation and adoption, paving the way for a more inclusive and efficient financial future.
